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Teradyne (TER) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Teradyne (TER) closed at $137.09, marking a +1.02% move from the previous day. This change outpaced the S&P 500's 0.04% gain on the day. Elsewhere, the Dow gained 0.19%, while the tech-heavy Nasdaq added 0.28%.

Heading into today, shares of the maker of wireless products, data storage and equipment to test semiconductors had gained 15.81% over the past month, outpacing the Computer and Technology sector's gain of 4.2% and the S&P 500's gain of 3.84% in that time.

Investors will be hoping for strength from TER as it approaches its next earnings release. In that report, analysts expect TER to post earnings of $0.99 per share. This would mark year-over-year growth of 12.5%. Meanwhile, our latest consensus estimate is calling for revenue of $716.56 million, up 9.46% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for TER. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.37% higher. TER is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that TER has a Forward P/E ratio of 27.96 right now. This represents a discount compared to its industry's average Forward P/E of 33.08.

We can also see that TER currently has a PEG ratio of 1.32. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TER's industry had an average PEG ratio of 3.89 as of yesterday's close.

The Electronics - Testing Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 235, which puts it in the bottom 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow TER in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research